Following the continued withholding of foreign airlines’ ticket sales earnings, the Association of Foreign Airlines and Representatives in Nigeria (AFARN) has accused the Federal Government of violating the Bilateral Air Service Agreement (BASA) arrangements it signed with various airlines.
According to AFARN, it is past time for the Federal Government to sit down with the affected airlines and agree on how to facilitate the repatriation of the funds, which have now surpassed $600 million.
Mr. Kingsley Nwokoma, President of AFARN, bemoaned what he called the Federal Government’s disregard for BASA arrangements.
What AFARN said
Mr. Nwokoma noted that despite the continued withholding of foreign airlines’ funds, Nigerian airlines operating regional and international routes have consistently repatriated their funds from foreign lands. He said:
- “The truth is that there is a BASA agreement. We are even lucky that foreign airlines still come to this country because if smaller countries can respect agreements, there is no reason we should not respect agreements. If Air Peace for instance goes to the United Arab Emirates (UAE), South Africa, air travellers procure its tickets, has Air Peace ever complained that it could not repatriate its funds? I have not heard that.
- “When Med-View was going to London and Dubai, people were buying its tickets, and the airline did not for one day complain about its inability to repatriate its funds. The aircraft you see is a long-term payment. You are having a business with Boeing or Airbus, and the economics have been done that some money is being paid regularly by the operators. This money comes from air tickets.
- “If other climes are like Nigeria, that means operators will not be able to meet their agreements with these companies. Unfortunately, things have degenerated to this level.”
Nwokoma emphasized that while the federal government may have directed the Central Bank of Nigeria (CBN) to pay some of the debts owed to foreign carriers, the debts have continued to rise as airline tickets are sold daily.
He warned that if foreign airlines continue to be denied access to the country, some of them may cease operations.
As part of the BASA arrangements, he urged the government to ensure the full release of the airlines’ trapped funds in the country.
- “Everybody knows that everything in aviation is done in US dollars; maintenance, payment, and others. So, that is why the BASA agreement was reached.
- “This issue will continue until the government finds a solution. The government should let us know their challenge and look for a way to address the situation,” he said.
Five airlines still unable to repatriate funds
Besides, two months after the federal government directed the CBN to release the part payment of $265 million, representing almost 50% of the total trapped funds, at least five of the carriers, majorly from Africa are yet to have access to their funds.
- A source close to one of the foreign airlines, who declined to be named as details are still private, confided in our correspondent that some of the airlines were yet to get any money from their trapped funds.
- The source regretted that the airlines were still facing the challenge despite the intervention of the International Air Transport Association (IATA) which has been in discussions with the CBN on the matter in the past four months.
- The source told our correspondent that his airline, one of the dominating carriers from West Africa was exempted from the funds by the CBN, while all efforts to correct the situation had failed.
According to the source, five of the continent’s airlines including AWA, Asky, Rwndair, and two others were yet to be credited by their banks from the approved funds by the federal government.
- The source said that the CBN had approved about $4 million for it as the first tranche of its $16 million total debts in the country in eight months, however, it said that IATA had intervened on the issue.
- However, it was also learned that to curb the losses, some foreign airlines have resorted to payment of the service providers in naira rather than in dollars.
